Sunday, May 19, 2024

Competitive: Number of Chinese-owned businesses in Hungary soaring – Daily News Hungary

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According to some recent figures, the number of Chinese-owned businesses in Hungary has increased significantly since the 2010s, with at present almost 600 companies in the country having at least one Chinese owner. Trade is still a booming sector, but Chinese entrepreneurs have also entered into new markets.

Besides political cooperation and economic agreements between the governments of China and Hungary – such as allowing Chinese officers to patrol the country, building a high-speed railway and Europe’s top border crossing with Chinese investment, and possibly broadcasting Chinese propaganda films on national television in the future –, it seems that Chinese businesspeople also find cooperation with Hungary to be a fruitful endeavour.

“Chinese companies are coming to Hungary in droves,” declares a recent article from Pénzcentrum.hu on the Hungarian economy and its companies owned by individuals with Chinese origins. As the online magazine writes, according to data from the OPTEN company-registration database, the number of Chinese-owned businesses operating in Hungary has followed a trend of steady growth in 2023.

The number of Chinese-owned businesses has increased significantly in the last decade or so

As highlighted by Pénzcentrum.hu, while the oldest Chinese company operating in Hungary has been present in the country for more than 30 years, the majority of businesses do not have such a longstanding history. More than 85 percent of Chinese enterprises located in Hungary today were registered only after 2010.

“There has been a dramatic change in the number of new companies established in Hungary since 2010, with more and more Chinese companies choosing Hungary,” Csaba Alföldi, OPTEN’s business information expert, told Pénzcentrum.hu.

There are currently more than 350 companies in the country whose sole and direct owners are companies or individuals registered in China. Furthermore, there are almost 600 companies in Hungary that have at least one Chinese owner.

Most of these enterprises, 80 percent of them in total, are registered in Budapest. It may be interesting to note, however, that the second most popular area for Chinese entrepreneurs is Csongrád-Csanád County and not Pest County, which lies in the larger catchment area of the capital. The dominant activity in both regions is trade, but accommodation services are also popular when it comes to Chinese-owned businesses.

Chinese firms are becoming increasingly active in new target sectors

While Chinese entrepreneurs are most highly represented in the commercial sector, according to the latest data from OPTEN, they are also gaining ground in manufacturing and construction.

In 2022, Chinese-owned businesses generated sales of more than HUF 450 billion (EUR 1.158 billion), which was more than three times the turnover of the previous year. The two most lucrative sectors were manufacturing and construction with 70 percent of turnover coming from the former, and 20 percent from the latter. The yields from the manufacturing sector tripled compared to 2021, while construction grew nearly ninefold by 2022.

“Even without the statistical data, trade and real estate are known to be targets for Chinese investors, something that individuals often face on a day-to-day basis, too. While trade is still the dominant activity for Chinese firms formed in 2020 and later, manufacturing is increasingly in sight, taking second place on the podium for new firms,”  said Csaba Alföldi.

“We can see that the structure of economic relations with China is changing. In terms of revenue, the stronger presence of manufacturing and construction is dominant, as opposed to the dominance of trade that has characterised the past,” the expert added.

Read also:

  • Why are middle-class Chinese moving to Hungary and do they speak English there? – Read HERE
  • Chinese investments worth EUR 16.5 billion underway in Hungary – Click HERE to read

Source: Pénzcentrum

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